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Property Brokerage Service

Written by Dea Amanta Azaria on 14/08/2024
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.

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Introduction

Owning property in Indonesia can be a complex process, especially for foreigners. The Property Brokerage Service simplifies this by providing a streamlined approach to buying or selling various properties, such as buildings or land. This service is typically managed by conveyancers who handle the legal intricacies involved in property transactions, ensuring that all necessary documentation is in order and a smooth transaction process.

Definition

Property Brokerage Service is a service that facilitates the buying and selling of properties, including detached houses, warehouses, buildings, and land. This service is typically managed by conveyancers, who handle the legal aspects of property transactions, including preparing and verifying necessary documents.

Conveyancers are professionals who manage the property buying and selling process, including administration, legal aspects, and signing property transfer or lease agreements. They ensure that all aspects and obligations are met, and completed the transaction smoothly.

Property ownership can be granted through obtaining Land Certificates. There are 7 (seven) types of land certificates for individuals or legal entities in Indonesia including:

Rights of Ownership (Hak Milik/SHM): Grants full ownership rights and is the strongest proof of land ownership, with no time limit. This ownership is regulated in Law No.5 Year 1960 .
Rights of Cultivation (Hak Guna Usaha/SHGU): Allows to cultivate state-controlled land for a specified period, typically 25 years.
Right to Build (Hak Guna Bangunan/SHGB): Permits to use the land for building purposes while the land remains state-owned, usually for 30 years.
Rights of Ownership Over Stacked Units (Hak Milik Atas Satuan Rumah Susun/SHMSRS): Proves the ownership for apartments or flats built on jointly owned land.
Rights of Use (Hak Pakai): Allows to utilize and gather resources from state-owned or privately owned land, subject to government approval.
Rights of Lease (Hak Sewa): Enables to lease land from another party, applicable to both Indonesian citizens and foreigners.
Right to Manage (Hak Pengelolaan/HPL): For government institutions and other government legal entities, to use and manage all or part of the land for their purposes or collaborate with others.

The Importance of Property Brokerage Services

Below are the format of unnumbered or numbered list for your product sheet or case study if required.

Legal Compliance: Ensures that all property transactions comply with local administrations, laws, and regulations, thereby avoiding legal complications.
Risk Mitigation: Reduces the risk of fraud and disputes by verifying the authenticity of property documents and ownership.
Efficiency: Streamlines the property transaction process, saving time and reducing the complexity involved in buying or selling property.
Security: Provides a sense of safety to both buyers and sellers or property owners and lessee by managing all aspects of the transaction.

The Best Time to Engage in Property Brokerage Service

Determining the optimal time to engage in property transactions and utilize conveyancing services in Indonesia involves several considerations, such as:

Market Conditions: It often depends on the current real estate market conditions. Engaging in transactions during a market of a buyer or lessee can result in better deals for purchasing or leasing a property, while a market of a seller or owner can be advantageous for those looking to sell or lease a property.
Property-Specific Factors: The condition of the property, its location, and any upcoming developments in the area can also influence the timing of a transaction. For instance, buying or leasing property in an area slated for infrastructure improvements can be advantageous.
Economic Climate: Economic stability and favorable interest rates can significantly impact the timing of property transactions. Lower interest rates can make financing more affordable, encouraging property purchases or lessee.
Regulatory Changes: Staying informed about upcoming changes in property administration, laws, and regulations can help timing transactions to benefit from new policies or avoid potential complications.

Benefits of Property Brokerage Services

Utilizing this service offers several customer-centric benefits, such as:

Certified Guidance: Obtain prepared and legally sound documents, ensuring that all necessary paperwork is handled with precision and compliance.
Risk Mitigation: Secure the transaction with verified, authentic property documents and ownership, significantly reducing the risks of fraud and disputes.
Streamlined Process: Receive a seamless and efficient property transaction process, saving time and minimizing complexity through professional handling of all administration and legal procedures.
Negotiation Support: Secure the best possible deal with professional assistance in negotiating favorable commercial terms of the transaction.
Efficient Financial Management: Manage the budgets effectively with professional oversight of all financial aspects of the transaction, including search fees, registration fees, surveyor fees, insurance, and stamp duty.

Requirements

To engage with our property brokerage Service, please prepare the following documents:

Business Identification & Personal Details:
- ID card for Indonesian citizens or passport for foreigners;
- Establishment deeds and amendments for legal entity.
Property Details:
- Property images;
- Advertising agreement;
- Copy of current property certificate;
- Building layout/blueprint.

Financial Details:
Copy of the latest land and building tax document for the related property.

Duriation

The process duration can vary based on the complexity and specifics of each transaction. For selling a property, the process may take 3 working days, that includes:

Property data collection (usage, size): 1 working day;
Agreement document drafting: 1 working day;
Property advertising: 1 working day.

The Process of Property Transaction

The process of property transactions in Indonesia involves several key stages, such as:

Property Preparation

Search For a Suitable Property Investment: Begin by looking and identifying a property that meets your investment criteria.
Make an Offer and Negotiate Terms: Through conveyancers, make an offer on the property and negotiate the commercial terms. A conveyancer can help ensure you get a suitable price.
Appoint Legal Advisors: Engage advisors to handle the legal aspects of the transaction and outline the terms to review.
Conduct Due Diligence: A surveyor will conduct due diligence to verify the authenticity and legal status of the property. The legal advisors will provide a report on the transaction, detailing any findings and necessary actions.
Sign Legal Documentation and Contracts: Finalize the transaction by signing the necessary documents and contracts, and paying the deposit.

Transaction Documents Preparation

Initial Purchase: Prepare the lease or sale contract and transfer document.
Existing Lease Purchase: Prepare the sale contract, transfer document, consent of the property owner, and any lease security documents.
New Lease Grant: Prepare the lease, consent of the property owner, and any lease security documents.

Completion Phase

Verify Certificate Status: Ensure the property certificate with the property owner to confirm its legal status before proceeding with the transfer or lease.
Sign the Necessary Documents: After the certificate verification is clear and both parties agree on the results, sign the documents outlining the terms and conditions for the land transfer or lease, whether for sale or leasing and make the necessary payments.
Key Handover for Property Transaction: Once the agreed payment is received by the owner/seller, proceed with the key handover to the new lessee or buyer. The handover allowed the buyer or lessee to utilize the property.
Transfer of Ownership for Purchase Activities: To complete property ownership during a purchase, the buyer must update the property title to their name through an administrative process with the National Land Agency (Badan Pertanahan Nasional/BPN). Once this is done, the buyer officially owns the property.

Some stages may overlap; for instance, conducting due diligence and negotiating transaction documents can simultaneously occur to save time.

How We Can Help

The team of professional conveyancers is dedicated to ensuring that all property transactions are performed smoothly. The services include:

Comprehensive Documentation: Ensuring relevant land documents are thoroughly prepared and verified before the property transaction. This includes drafting and reviewing the property transaction documents to meet legal requirements.
Legal Compliance: Ensuring all transactions comply with local administration, laws, and regulations to mitigate the risk of legal disputes or complications.
Risk Management: Conducting due diligence to verify the authenticity of property documents and ownership, reducing the risk of fraud and disputes.
Negotiation Support: Assisting in negotiating the terms, ensuring that both buyers and sellers are protected and that the terms are fair and legally sound.
Registration Assistance: Assisting the administrative process at BPN after signing the documents to finalize the property transaction.

FAQs

Can a foreigner own a property in Indonesia?

Yes, a foreigner can own property in Indonesia under certain conditions, such as a landed house or apartment.

For example, in Jakarta, the minimum price for a landed house a foreigner can purchase is IDR 5 billion, while the minimum price for an apartment is IDR 3 billion.

What is the transfer of ownership?

Transfer of ownership is the process of updating the previous property owner with the new owner. The process involves registering an application to the BPN with the required documents.

What should be done if there is a dispute or legal issue related to the property?

It is recommended to consult with a lawyer or legal expert experienced in property law when engaging in a property issue. They can provide advice and solutions for resolving disputes or legal issues that may arise. The land certificate verification process may help in preventing the issue.

What are the considerations for choosing a suitable property broker?

It is recommended to look for a property broker who offers end-to-end assistance, from selecting the property to preparing the necessary documentation, such as lease or sale contracts and transfer documents.

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